This is my first time posting, although Im not new to this forum. Im so thankful to have a community to go to for help/questions. So this is my dilemma. Ive been open for less than a year now. But now realize how low my rates are compared to other home centers that offer all that i do. I currently charge $120/week for ages 2+ for 9.5 hours. my rate includes all meals,we do daily activities, preschool curriculum,crafts, sign language, spanish, and field trips to museums etc. I want to also incorporate yoga once a week with an instructor. I am in the raleigh, NC area,and Im thinking of raising my rate to $140. I have 2 new kids that are paying this rate and the mom said this was even a low rate. My question is how would I go about increasing my older clients. they've all told me during their interviews that my rate was low. But i dont want to just hit them with an $80/month increase. any suggestions how I should go about? i know i give exceptional care, my kids cry when its time to go home. families are all happy and most of all the kids are learning and very happy. I just feel like im working so hard and barely able to make a profit with all we do.Thanks in advance to all!

When I found out I was charging at least $20 less a week than everybody else locally, I gave my dcfs a month's notice that rates would be increasing $5 a week every 6 months. And I'm still not up to others' rates, so I like the idea of quarterly much better. All new enrollments are charged the higher rate coming in.
THEN I found out a local center, which happens to own 2 big centers in our small community, charge $200 a week. That's a huge difference from what all the in-home providers are charging. I think we're getting the short end of the deal.

I didnít increase rates this year but they will go up next year. When I opened this past year, I researched rates in the area and placed myself at the top right off the bat. I went $5 week cheaper than one other person but about $20 higher a week than the average. It was risky since I was just starting out but I knew how much I would feel comfortable charging for the amount of work I was committing to. I havenít had a single issue with parents feeling my rates are too high. I even have one DCG whose mom took a second part time job in order to afford to bring her daughter to me because she felt so good about the environment I was providing.

I plan to raise rates annually in January each year starting next year. Most likely by 3%-5%.

If you want to raise your rates now, Iíd do it a little at a time so that itís gradual but make parents aware of when to expect the increases.

I successfully restructured my hours and tuition after my first child was enrolled. First the new policies were rolled out to all new families and eventually notice was given to that initial family.

One thing to be clear on is what is the goal with the change.... my end goal was to shorten my day with the changes, it sounds like your goal is to increase income so always keep that in mind. I bring this up for two reasons 1) I always knew when I opened I wanted a short day but my policies did not match that - they maximized my income with the potential of a shorter day but did not guarantee the short day I desired and 2) because on one hand you state you want $20 more per week per spot but then you also say you want to add a yoga class with an instructor. Having the instructor would increase your overhead so you need to factor that when adjusting your prices to ensure you bring home what you need/want.

A couple different options to increase rates from those already enrolled:

- Add an activity fee. Sell them on new/upgraded services (preschool curric., music class, yoga, etc.). Tell them the additional fee is X per week and is due regardless of attendance. Really play up the new service(s) and get their buy in. (When I first opened I had a monthly music class fee.... it was required and not one parent questioned this.)

- In my opinion in terms of increasing income the best option is to switch to contracted hours based on pick up times for all families! When I first opened I offered contracted hours based on pick up times, the first family enrolled needed my max hours so I did not get the short day I desired but I did make a lot more money for my time. With the contracted hours I made $10 more per day than the highest provider in my area for my max hours. BlackCat & DayCare both offer contracted hours based on pick up times so look at their post especially for examples.

Quote:

Originally Posted by Blackcat31

I use contracted hours and can no longer wrap my head around why some providers do not. lol!

However, I usually introduce new families to new payment/rate policies but wanted all my families on contracted hours so I could have better control in when I work and when I am off work. I own a separate child care house so I certainly didn't want to be at work any earlier or longer than I really needed to be...kwim?

I wrote a letter telling parents that rather than raise rates across the board, I was instead implementing a rate structure that would allow the parent to control their child care costs. Basically, I "sold" it to them something that benefited THEM.

Now I know EXACTLY when I need to be here and when I can leave. Thus allowing me to schedule appointments and other personal things outside of work verses having to find a substitute or having to close.

I now make MORE money and work LESS hours.
People will find a way to do X if it will save them money.
If they just pay by the day, then they want their money's worth and won't waste using it.
I think it's the secret to "marketing" and sales really......

Full disclosure I opted to do away with contracted hours for myself since I quickly realized I did not want to offer a full day program regardless of the additional money.

When I found out I was charging at least $20 less a week than everybody else locally, I gave my dcfs a month's notice that rates would be increasing $5 a week every 6 months. And I'm still not up to others' rates, so I like the idea of quarterly much better. All new enrollments are charged the higher rate coming in.
THEN I found out a local center, which happens to own 2 big centers in our small community, charge $200 a week. That's a huge difference from what all the in-home providers are charging. I think we're getting the short end of the deal.

Same with me, Im about $20-$30 lower than others nearby and I offer much more than them. Lesson learned I know I sold myself short now . Im going to do the $5 increments every quarter. Thanks for responding!

I didnít increase rates this year but they will go up next year. When I opened this past year, I researched rates in the area and placed myself at the top right off the bat. I went $5 week cheaper than one other person but about $20 higher a week than the average. It was risky since I was just starting out but I knew how much I would feel comfortable charging for the amount of work I was committing to. I havenít had a single issue with parents feeling my rates are too high. I even have one DCG whose mom took a second part time job in order to afford to bring her daughter to me because she felt so good about the environment I was providing.

I plan to raise rates annually in January each year starting next year. Most likely by 3%-5%.

If you want to raise your rates now, Iíd do it a little at a time so that itís gradual but make parents aware of when to expect the increases.

Thank you so much for responding! Im sending out increase letters friday!

I successfully restructured my hours and tuition after my first child was enrolled. First the new policies were rolled out to all new families and eventually notice was given to that initial family.

One thing to be clear on is what is the goal with the change.... my end goal was to shorten my day with the changes, it sounds like your goal is to increase income so always keep that in mind. I bring this up for two reasons 1) I always knew when I opened I wanted a short day but my policies did not match that - they maximized my income with the potential of a shorter day but did not guarantee the short day I desired and 2) because on one hand you state you want $20 more per week per spot but then you also say you want to add a yoga class with an instructor. Having the instructor would increase your overhead so you need to factor that when adjusting your prices to ensure you bring home what you need/want.

A couple different options to increase rates from those already enrolled:

- Add an activity fee. Sell them on new/upgraded services (preschool curric., music class, yoga, etc.). Tell them the additional fee is X per week and is due regardless of attendance. Really play up the new service(s) and get their buy in. (When I first opened I had a monthly music class fee.... it was required and not one parent questioned this.)

- In my opinion in terms of increasing income the best option is to switch to contracted hours based on pick up times for all families! When I first opened I offered contracted hours based on pick up times, the first family enrolled needed my max hours so I did not get the short day I desired but I did make a lot more money for my time. With the contracted hours I made $10 more per day than the highest provider in my area for my max hours. BlackCat & DayCare both offer contracted hours based on pick up times so look at their post especially for examples.

Full disclosure I opted to do away with contracted hours for myself since I quickly realized I did not want to offer a full day program regardless of the additional money.

Charging according to pick up time eliminates that resentful feeling when you have one kid there later than everyone else feeling. Now if that one kid is here later than the others, I am being compensated well for it so it's something I can rectify in my head much easier.

I also don't have parents complain about their rates either.
If they want to save money, pick up earlier.
Win-win for everyone!

Like my previous post said, I work less hours now but make more money.

I am not sure that contracted hours would ever work in my case. Most jobs around here are 8-5 or 8-4:30 (depending on alloted lunch break) salary type jobs. There is a fairly large clinic/hospital with hospital hour like shifts that differ from the norm (6AM-3PM) but I am unwilling to open earlier than 7AM. The clinic has its own daycare where at least one parent must be employed there and their rates are based on what the parents salary is. I used to sit for a family of two doctors. They were/are paying $285 a week for their daughters spot while her medical assistants child is in the same class paying over $100 less a week. My hours are not bad now. I advertise 7:00-5:30 but I rarely work ďopen to closeĒ.

I am not sure that contracted hours would ever work in my case. Most jobs around here are 8-5 or 8-4:30 (depending on alloted lunch break) salary type jobs. There is a fairly large clinic/hospital with hospital hour like shifts that differ from the norm (6AM-3PM) but I am unwilling to open earlier than 7AM. The clinic has its own daycare where at least one parent must be employed there and their rates are based on what the parents salary is. I used to sit for a family of two doctors. They were/are paying $285 a week for their daughters spot while her medical assistants child is in the same class paying over $100 less a week. My hours are not bad now. I advertise 7:00-5:30 but I rarely work ďopen to closeĒ.

Same here (as far a job types and hours etc) but it's amazing how quickly a daycare family can get assistance from a friend or family member if it means they save money.

I had a family that used services from open to close. Parents struggled with listing a back up person for alternate care if needed... said they literally knew no one in town and had no family or other relatives near by.

I changed my rate structure. The new rate scale made it so they would be paying an additional $50 per week.

Suddenly mom had neighbors and friends coming out of the woodwork wanting to help out and pick up the child earlier than mom or dad were able.

I don't spend a single second worrying about job hours, availability of family, friends or neighbors when I set my rates. I worry only about being compensated for the later pick ups and it's truly enlightening to see that family's that couldn't manage previously manage great now!

Add money into the situation and parents suddenly "think" differently.

Same here (as far a job types and hours etc) but it's amazing how quickly a daycare family can get assistance from a friend or family member if it means they save money.

I had a family that used services from open to close. Parents struggled with listing a back up person for alternate care if needed... said they literally knew no one in town and had no family or other relatives near by.

I changed my rate structure. The new rate scale made it so they would be paying an additional $50 per week.

Suddenly mom had neighbors and friends coming out of the woodwork wanting to help out and pick up the child earlier than mom or dad were able.

I don't spend a single second worrying about job hours, availability of family, friends or neighbors when I set my rates. I worry only about being compensated for the later pick ups and it's truly enlightening to see that family's that couldn't manage previously manage great now!

Add money into the situation and parents suddenly "think" differently.

When a client truly wants your services, they will do what it takes to make it work!

Charging according to pick up time eliminates that resentful feeling when you have one kid there later than everyone else feeling. Now if that one kid is here later than the others, I am being compensated well for it so it's something I can rectify in my head much easier.

I also don't have parents complain about their rates either.
If they want to save money, pick up earlier.
Win-win for everyone!

Like my previous post said, I work less hours now but make more money.

I was trying to find your post that listed the pick up times and sample rates but could not. I really like how easy your contracted rates were broken down.

Charging according to pick up time eliminates that resentful feeling when you have one kid there later than everyone else feeling. Now if that one kid is here later than the others, I am being compensated well for it so it's something I can rectify in my head much easier.

I also don't have parents complain about their rates either.
If they want to save money, pick up earlier.
Win-win for everyone!

Like my previous post said, I work less hours now but make more money.

I like this structure! How do you handle drop offs? I have one family who will bring her child occasionally on her day off so Mom will drop off an hour later than normal to let her sleep in, etc. Do you allow this? It makes the morning unpredictable and throws off the little ones nap schedule. My biggest hesitation is I don't know of any other in home daycares in this area who have contracts that the parents sign and who don't charge strictly by the hour. I am the only one that I know of who charges by the day whether they are here the entire time or not. I'm also the only one who charges for sick days. I don't want to make my set up too different from everyone else as I feel I'm already pushing the standards for our area. We live in a small community, people talk A LOT and I'd hate to be who they are talking about. My anxiety couldn't handle that! LOL!

I am not sure that contracted hours would ever work in my case. Most jobs around here are 8-5 or 8-4:30 (depending on alloted lunch break) salary type jobs. There is a fairly large clinic/hospital with hospital hour like shifts that differ from the norm (6AM-3PM) but I am unwilling to open earlier than 7AM. The clinic has its own daycare where at least one parent must be employed there and their rates are based on what the parents salary is. I used to sit for a family of two doctors. They were/are paying $285 a week for their daughters spot while her medical assistants child is in the same class paying over $100 less a week. My hours are not bad now. I advertise 7:00-5:30 but I rarely work “open to close”.

I think that is the beauty of contracted hours. In most cases on this forum those with contracted hours still offer the option for a full day program just parents are in control of their cost by selecting the pick up time that works best for them based on either their schedule or their resources. From a provider stand point you earn more and tend to have less children toward the end of the day.

I did away with contracted hours but that is only because I switched to a part-day program only. For those full day I don't see what you lose by offering a contracted payment structure based on pick up times from a provider standpoint - well maybe billing, different families would have different tuition amounts vs. everyone having the same rate.

Quote:

Originally Posted by Blackcat31

I don't spend a single second worrying about job hours, availability of family, friends or neighbors when I set my rates.

Ditto. I do not care when they get off work, if they run errands while their child is here, etc. I care that they respect my policies, pay on time and pick up on time.

Quote:

Originally Posted by Annalee

When a client truly wants your services, they will do what it takes to make it work!

I switched from contracted hours to a part-day program only. All of the families made the transition one of which has two parents working full time outside the home. Offer a quality program and parents will move mountains to try and make it work.

I like this structure! How do you handle drop offs? I have one family who will bring her child occasionally on her day off so Mom will drop off an hour later than normal to let her sleep in, etc. Do you allow this? It makes the morning unpredictable and throws off the little ones nap schedule. My biggest hesitation is I don't know of any other in home daycares in this area who have contracts that the parents sign and who don't charge strictly by the hour. I am the only one that I know of who charges by the day whether they are here the entire time or not. I'm also the only one who charges for sick days. I don't want to make my set up too different from everyone else as I feel I'm already pushing the standards for our area. We live in a small community, people talk A LOT and I'd hate to be who they are talking about. My anxiety couldn't handle that! LOL!

I don't care what time they drop off as I don't count hours in care...only the time picked up. HOWEVER, each family is required to provide a written schedule on Friday prior to the upcoming week so in your case, that mom would have to schedule her child being in attendance on her day off.

I don't allow schedule changes after they are submitted unless it's an unusual circumstance or something that simply couldn't be helped but I never allow parents to decide day by day if they are or aren't attending.

I don't have one now but I would have a drop off cut off time so that it isn't disruptive when accommodating an unscheduled drop off or one that isn't routine. That eliminates the disruption for others.

I charge 52 weeks a year regardless of absences, closures or time used/not used.

I'm in California too. We're the size of a small European country, so prices vary widely as does the cost of living.

I chare $180 per week for infants, and $165 for everyone else. I raised my rates at the new school year in September.

When I raise my rates I usually just make my infant rate my new preschooler rate, and then raise the infant rate. I don't raise on current families....but they don't get to step down when their child ages up either...so it all works out.

i'm in California and the weekly rates in here is $250 and up for 2-5 yrs old and i increase rate every July depending on child care rates from the gov't that i get every year too

Iím also in California and just starts taking infants again and started my rates at $185. Moms who came to interview said my rates were very reasnible. Now I see why lol. Iím under charging. What part of California are you in? Iím in southern Cali, riverside county.

i like the idea about the 5% increase written into their policies, i may do that. I was also low and only increased for new parents coming in, if i still got the "wow your low" then id increase it again, i may have had one family around 120 another around 135 and another around 150 but it evened out for me and when the older tuition kids aged out i still had my bigger rate for new incoming families

Thank you for posting that hwichlaz! I havenít opened yet, wonít be for awhile, and seeing the reimbursement rates is very useful in helping me set mine.

They are based on a survey sent out to random providers in each county. In my county it goes out to every provider because there are so few of us. They use it to come up with an average rate. I always round up so Iím a bit higher than average.

I raise prices yearly, but only for incoming clients. I offer "same price for life" as people sign up. As long as they pay on time and follow rules etc...their payment will never go up[ (I charge a flat rate) Miss one payment...be a pain....payment goes up to current rate on the next pay day.

Works for me. Keeps them on their toes about paying on time and following policies. They also know that shopping around for cheaper may work for now, but they'll end up paying more before long as fees go up in most places.